Local markets sell a wider range of fresh produce than supermarkets at half the price, says the New Economics Foundation (NEF).
They also generate more jobs per square metre of retail space than the large chains, according to the NEF study.
The report adds to the growing backlash against retail giants such as Tesco and Asda, amid concerns that independent retailers are being forced out of business by unethical practices.
Guy Rubin, author of the NEF report, said: “The irony is that planning decisions are being taken which are undermining the small enterprises that can prevent us from becoming a nation of clone towns, as well as impoverishing local communities and economies and reducing consumer choice. They may even be resulting in net job losses.”
The Competition Commission has announced that it is launching a full enquiry into the £95 billion grocery sector after accusations that the big supermarkets are selling goods below cost.
There are more than 1,700 markets in the UK through which shoppers spend £1.3 billion a year.
But Sainsbury’s, Asda, Tesco and Morrisons control 75 per cent of the sector.
The NEF report focused on Queens’ Market in east London, which is also the subject of the film Walmart: The High Cost of Low Price. The film, which premiered last week, shows the struggle of Queen’s Market against plans to demolish it and build a giant Asda store on the same site.
The big supermarkets have always claimed that they create more jobs, offer consumers more choice and keep food prices down.
But the NEF report found that an average basket of goods bought at Queen’s Market was 53 per cent cheaper than at the nearest Asda supermarket.
The market generates £13 million a year for the local economy, according to the report.
Low-income customers could also haggle prices down, and people from ethnic minorities in the areas said they had better access to specialist foods such as halal meat and Afro-Caribbean fruit and vegetables.
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